[taligent]

I would be curious to know the costs and implications for adopting an Australian solution.

Here in Australia everyone can go to college and what happens is that the tax office keeps track of the money you owe and then as you start earning money they pay the loan back through a tax increase. You also get a discount if you have the loan back quicker. It's all seamless and you can also add books/computer to the loan as well.

[meric]

We probably want to mention that there is a limit to how much we can borrow.

"The 2012 limits (indexed annually) are $89 706 for most courses and $112 134 for students undertaking a medicine, dentistry or veterinary science course" http://www.deewr.gov.au/HigherEducation/Programs/StudentSupp...

..which is hardly enough for many degrees in many universities in the US, where it can cost over $40k a year.

Of course, this is Australia and even if a student didn't make it to HECS-HELP where the government subsidies around two thirds of the cost of a degree, or for international students where government funding and lending isn't available, a degree can't cost more than $25k a year.

[wisty]

Because it's effectively a price control, and price controls are bad and communist and evil.

[netcan]

Sarcasm aside, yes.

The Aussie HECS system is more like the European style systems than american ones where universities compete in a semi-free market. Unis get paid a set amount per student. Student contributions are a fixed contribution to the total. Including the subsidized loans but not including founding & research grants to Universities, they account for about 25% of total costs, an incentive to take it seriously but not a pay-you-own-way system. Very far from a free market.

The interesting element of the Aussie system is that they have maintained competitiveness and a steep quality curve more similar to the American environment with the best Unis (eg ANU & Melbourne) ranked much high internationally than the those just a step down locally. Australia has more highly ranked Unis than most European countries with larger populations.

But.. Judging by inflation in international & (the less subsidized) "full fee place" tuition, fees are rising fast down under too.

[brazzy]

It seems to me that the bizarre excesses of the "education bubble" are the direct result of a free market in education and prove that it's a bad idea.

Education is not something where there should ever be an attempt to capture the consumer surplus.

[hackinthebochs]

The education bubble is in fact caused by the opposite of the free market. On one end you have government subsidies and no corresponding price controls which inflate demand and drive up prices. On the other end you have no negative feedback mechanism in terms of shedding the debt in bankruptcy for degrees that turn out to be worthless.

There is no downside for institutions to continually inflate prices, so they do. Incentives run the world.

[jbarham]

I think the more pressing issue for Australians will be the costs and implications of the currently deflating housing bubble... Similarly in Canada. The US student debt bubble is just another "asset" bubble that's primed to burst.

[HEYGRANDMA]

And the loans are only indexed to CPI too. So you won't end up getting crushed by interest if you can't pay it back quickly.

[guelo]

Sounds way too sensible for the US.